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Dreamweaver CS3 Browser Preview

HI there
Dreamweaver CS3 seems not to be forgiving program at all. I still currently work on the old Dreamweaver MX 6 which proves to be the good old faithful engine.

Anyway I wanna make this move to DMWCS3 but Its a little of a culture shock.

Here's the Problem:
I successfully setup the testing server using the wizard to create a new site, which shows to be successful (http://localhost/). when you click TEST URL.

Here's the kicker:
When It's time to preview the page "All you see is "The source code in the browser". In the old version of Dreamweaver everything works just fine. Are these programs conflicting with each other? What the hell is going on?